At the beginning of the new year of 2020, the former Lenovo China mobile phone business leader who had just left the company for personal reasons often joined Xiaomi, and the news of the mobile phone business was screened by the industry. The controversy that ensued naturally fell on Lenovo’s departure from Changcheng and the future of Xiaomi’s mobile phone after joining Changcheng. Today, we will leave Lenovo Mobile through a regular journey to analyze the changes in Lenovo’s mobile phone business over the years. What is it for?
The development of Lenovo ’s mobile business has caused such concern and doubt today. In fact, it still started in the same 2014 that also caused unscrupulous mergers and acquisitions, that is, Lenovo acquired Motorola Mobile for $ 2.9 billion.
Chen Xudong takes over Liu Jun and “destroys” Lenovo brand with ZUK
Here we look at the performance of Lenovo Mobile the year before Lenovo’s acquisition of Motorola Mobile, that is, in fiscal year 2013 as of March 31, 2014, Lenovo’s smartphone sales exceeded 50 million and mobile device sales totaled 5.657 billion The US dollar (including tablet computers) increased by 86% year-on-year. Among them, Lenovo’s smartphone sales in China alone increased by 55% year-on-year to 44 million units, with a market share of 11.8%, ranking second in the Chinese market. At that time, Lenovo’s mobile device business became the biggest highlight of FY2013 results.
In contrast, Motorola Mobile’s mobile phone shipments in 2013 were about 32 million units, with revenue of $ 4.438 billion and a loss of $ 1,245 million.
FY2014 ended March 31, 2015, after two quarters of results including Motorola (Lenovo’s acquisition of Motorola Mobile was officially approved in November 2014, and began to be included in Lenovo Mobile’s performance), mobile business Revenue was US $ 9,142 million, an increase of 71% year-on-year, and global sales increased by more than 50% year-on-year. Shipments were 76 million units, and mobile business lost US $ 370 million. (Note: During this fiscal year, Lenovo ’s mobile business was in charge of Liu Jun until he left office in May 2015)
A year later, in the 2015 fiscal year ended March 31, 2016, Lenovo ’s mobile business revenue rose 7% year-on-year to US $ 9.779 billion. At the same time, smartphone sales fell 13% year-on-year to 66 million units. Lenovo ‘S global smartphone market share fell 1.1 percentage points year-on-year to 4.6%, because growth elsewhere could not compensate for the decline in China’s main battlefield, with a loss of US $ 469 million. (Note: During this fiscal year, Lenovo ’s mobile business was basically handled by Chen Xudong, who took over from Liu Jun)
From a year or so after the merger, Motorola ’s huge losses before the merger did significantly reduce the performance of Lenovo Mobile in the past, and in the meantime, it has been dominated by the Chinese smartphone market and has dominated the market. In the domestic smartphone market, Lenovo has experienced a shift from the operator’s custom market to the open market. Sales have started to decline, and natural revenue and profits will be affected. The loss of Motorola’s mobile losses has been reduced, resulting in an increase in mobile business losses by nearly 100 million US dollars.
It is reasonable to say that during this period, Lenovo should focus its resources on reinventing Lenovo phones in innovation, branding, and marketing. However, it is puzzling that instead of doing so, Lenovo was led by the magic factory ZUK (Lenovo in 2014) (Mid-Autumn Festival) officially launched the independent mobile phone brand ZUK mobile phone. Liu Jun, who was in charge of Lenovo ’s mobile phone business, was “resigned” and replaced by Chen Xudong. Later, the magic factory ZUK returned to Lenovo Mobile. Since then, Lenovo has concentrated its main resources on ZUK (created by Chen Xudong after all) and high-end Motorola in the Chinese market, neglecting to reshape Lenovo brand mobile phones.
Because of this, Lenovo ’s mobile phone brand awareness has plummeted, and Motorola, whose brand awareness and influence have already shrunk in the Chinese market, has failed to make a breakthrough at the high end, and Lenovo ’s own brand has also lost it. Nonetheless, due to Chen Xudong’s strong investment in ZUK during his tenure, ZUK also has a small reputation in the industry and the market, but was soon “killed” by Lenovo’s new round of personnel appointments.
InterceptFor the 2016 fiscal year ended March 31, 2017, revenue from the mobile business decreased by 10% year-on-year to US $ 7.707 billion. Sales fell 22% year-on-year, its global smartphone market share was 3.5%, and its loss was US $ 566 million. The reason is that the loss was mainly due to the increase in brand and marketing expenses for new product launches and the increase in major component costs. (Note that this fiscal year is still mainly responsible for Chen Xudong, although he left in November 2016)
The layman Qiao Jian succeeds Chen Xudong, and the last straw of the Lenovo brand is overwhelmed
As of the fiscal year ended March 31, 2018, the total annual revenue of the mobile business was 7.24 billion US dollars, a year-on-year decrease of 6%. Sales fell 7% year-on-year, with a loss of $ 603 million.
During this period, Qiao Jian, who was in charge of human resources, replaced Chen Xudong to lead the mobile Lenovo China mobile phone business. However, during his helm, Lenovo mobile phones experienced more personnel shocks.
Qiao Jian, who has never been in the mobile phone business, deserves his human resources background. After taking over, the methodology is to dig people. He has dug Lu Dengxuan from Dell to be responsible for branding and marketing; he has dug Yu Yun and Ma Daojie from the operator to be responsible for channels Construction; Jiang Zhen was recruited from Samsung to take charge of the product, trying to make a big transformation to Lenovo Mobile. However, the good times didn’t last long. Ma Daojie, Yu Yi, and others left Lenovo Mobile one after another. Qiao Jian’s time-consuming and expensive executive team formed a mess in less than a year.
On the important product side, under the strategy of Yang Yuanqing’s Motorola to be the only Lenovo mobile phone brand in the future, Lenovo ’s China Mobile business has a narrower growth space, and the ZUK brand mobile phone that has just started to improve in 2017 It was officially closed in July (the so-called integration is the cancellation).
So far, except for the Motorola brand, almost all of the brands that originally belonged to Lenovo “disappeared”, and the decline in sales has not been contained, according to data released by the international investigation agency GFKIn 2017, Lenovo’s mobile phone market share in China has fallen to tenth, only 1.79 million units.
Maybe it ’s so miserable that even the mobile phone layman Qiao Jian, who is known as a “big sister”, realizes the danger of going on like this. In March 2018, Lenovo Mobile launched three Lenovo S5, K5, and K5play phones in one breath. In this regard, Qiao Jian’s explanation at the time was that in the future, Lenovo’s mobile phones will use two brands, Lenovo and Motorola, to focus on online and offline, respectively. In 2018, Lenovo mobile phones will have more than 10 new products released one after another, and strive to return to the top ten in the market during the year.
Ming Yang Yuanqing set Motorola to be the only brand of Lenovo ’s mobile phone in the future. In 2017, Qiao Jian also used the so-called “mixed blood” to describe the integration of Lenovo and ZUK brands into Motorola at Lenovo TechWorld 2017. Why did it restart Lenovo brand in March 2018? And launch new products, and start playing a “dual brand” strategy? Did Yang Yuanqing change his mind again? Still Qiao Jian’s private decision. In short, after the so-called Lenovo brand restart and new product launch two months later, Qiao Jian’s position was replaced by the regular process. The answer was unanimous, and Qiao Jian’s plan during his term of office also succumbed to it.
Continuous succession, and finally defending the “Don Quixote” of the Lenovo brand
As of May 2018, Lenovo merged the personal computer and smart device business group with the mobile business group to form a new smart device business group. He once led the ZUK brand and Xiaomi and other brands to take the lead and succeed Qiao Jian, becoming the head of Lenovo’s China mobile business.
Cheng Cheng took over, negating Qiao Jian’s strategy and resurrecting the Lenovo brand (Lenovo is finally on track, but it’s too late). On June 5, 2018, Lenovo Z5 new product launch conference, Lenovo mobile phone brand “Conscience excellent product national mobile phone”, and signed the popular traffic artist Zhu Yilong as the spokesperson, coupled with the regular desperate touch of porcelain marketing, Z5 sales are full of force.
It seems that the Lenovo brand and the Chinese market are seeing hope for recovery. But the facts are far from this. After all, the time has changed, and the situation in the Chinese market is now very different from the original Lenovo’s decline in the Chinese market. Almost all smartphone-related business models have strong competitors. At this time, Lenovo Mobile ’s overall strategy is still to set Yang Yuanqing’s profit first.
We believe that the Jedi fights back, but the reality is more helpless, and the missed is destined to be missed. In fact, since the day when Chang Cheng took over from Qiao Jian, even if there are always three heads and six arms in the routine, it is still unable to return to heaven. It’s a pity that Chang Cheng is like “Don Quixote”, rushing to the windmill with a spear, but he doesn’t know who the real opponent is and what his future destiny is.
This is indeed the case. After a short period of explosive power, Lenovo ’s S5 Pro, Lenovo Z5s, Z6 Pro, Lenovo Z6, Lenovo Z6 Youth Edition, and Lenovo Z6 Pro 5G this year have failed to cause market response. The downturn is irreversible.
As of the fiscal year 2018 on March 31, 2019, mobile business revenue fell 11% year-on-year to US $ 6.46 billion, with a loss of US $ 139 million. As for the reason for the substantial loss reduction, according to Lenovo ’s official explanation, in the past fiscal year, the Lenovo Group ’s mobile business group initiated a series of strategic changes to reduce expenses, streamline its product portfolio, and focus on core markets in Latin America and North America. Reduced the mobile business group’s expenses this year from about $ 1.5 billion to $ 1 billion.
Since the acquisition of Motorola Mobility, Lenovo Mobile has ushered in the smallest loss in the first fiscal year (already close to profit), but don’t be too happy, this smallest loss is not obtained through product innovation and real market competition. It’s a cost savings of $ 50 million to $ 100 million per quarter. And Lenovo China’s mobile business is completely zero.
So the question comes. So far, has Lenovo acquired Motorola Mobile successfully?
Brand and market translocation, Motorola brand “success” lost Lenovo Mobile
Before discussing and judging the success of Lenovo ’s acquisition of Motorola Mobility, let ’s take a look at the performance of Lenovo ’s overall mobile business since the completion of Lenovo ’s acquisition of Motorola Mobility.
To this end, we have made a simple statistics of Lenovo Mobile’s shipments, revenues and profits from FY 2014 to FY 2018. In terms of shipments, 76 million units in FY 2014 and 4076 in FY 2018 10,000 units, a cumulative decline of 46.37%; in terms of revenue, in fiscal 2014 was 9.142 billion US dollars, in fiscal year 2018 was 6.46 billion US dollars, a cumulative decline of 29.33%; profit from FY2014 to FY2018, with a cumulative loss of 2.147 billion US dollars.
It can be seen that, today, about 5 years after the acquisition of Motorola Mobile, Lenovo Mobile has not only increased its annual shipments or annual revenue, but has fallen sharply, leading to Lenovo ’s smartphones. In China, the shipment volume of the smart phone market ranked second from the original, and it has fallen to neglect today; in the global smart phone market, it has fallen from the third in the world to the seventh.
It needs to be explained that the gap between Lenovo ’s so-called seventh and sixth (vivo) is more than doubled, and it is only one million to two million ahead of the two manufacturers behind it (LG and Transsion Holdings). This means that the possibility of Lenovo’s smartphone rankings going up in the future is very small, but it is surpassed, and the possibility of falling rankings is quite high.
In addition, combining the performance of Lenovo Mobile ’s current acquisition of Motorola Mobile (see the aforementioned FY2014 shipments) and current (see the aforementioned FY2018 shipments), we have found an interesting number, which is in Since the acquisition of Motorola Mobile, there has been almost no increase in annual shipments of its smartphones. It is just that sales from the previous Chinese market and Lenovo brands have all gone to overseas markets (this is from the current sales of Lenovo smartphones in the Chinese market). It can be ignored and supported) and Motorola brand (the well-known fact is that Lenovo Mobile’s overseas market is almost supported by the acquired Motorola mobile phone brand).
In other words, after the merger and acquisition of Motorola Mobile for about 5 years, Lenovo’s mobile business market and brand have been transposed. why?
The reason is very simple. Now that the current shipments and brands have been transposed to the acquired Motorola, a list of Motorola Mobile ’s performance before and after Lenovo ’s acquisition is listed.
Motorola Mobile shipped about 32 million smartphones in 2013 (one year before Lenovo’s merger), with revenue of $ 4.438 billion and a loss of $ 1.245 billion.For the fiscal year ended 2018, Lenovo Mobile shipped 40.76 million smartphones with revenue of $ 6.46 billion and a loss of $ 139 million. About 5 years after the merger, Motorola ’s smartphone shipments under Lenovo Mobile ’s cumulative annual growth have increased by 20.76%; annual revenue has increased by 31.3%; and the annual loss has been reduced by USD 1.106 billion.
From this comparison, who can deny that Lenovo’s acquisition of Motorola Mobile has failed? Obviously in the hands of Lenovo, Motorola’s mobile phone brand has greatly improved its profitability in terms of annual shipments, annual revenue and annual loss reduction.
I do n’t know in the industry, especially after Lenovo ’s acquisition of Motorola Mobile, how did the senior management of Lenovo Brand and Lenovo ’s China ’s mobile phone business transition (appointed and resigned) evaluate the above in different dimensions, Business contrast.
Is Lenovo’s acquisition of Motorola Mobile really successful? Or have you been paying for the original decision to acquire Motorola Mobility?